Companies are missing the point of the empty office

The empty office exposes a deeper problem: Do companies actually understand their employees?

As more offices sit unoccupied, many corporate leaders still haven’t quite figured out how to deal with their empty workspaces.

Four in five companies have seen office utilisation rates dip below 50%, compared to just one in five pre-pandemic, data from JLL’s Occupancy Benchmarking Report shows.

While the numbers paint a bleak picture, there has to be a simple explanation as to why employees are choosing not to return to the office. Nailing the ‘why’ will almost certainly facilitate a seamless workplace transition in the hybrid era.

Consider the notion of ‘Know Your Customer (KYC)’, a process commonly used in the financial services industry. By employing a similar approach in the real estate sector, it would involve understanding the people working in a building, their needs and wants, and factors that would incentivise them to return to the office.

For companies, these “customers” are their employees. Truly knowing them entails understanding their daily work routines, from how they work and collaborate in teams to what they need or enjoy in the office and beyond.

This deeper knowledge of employee’s workplace preferences and attitudes has become increasingly critical, especially at a time when office utilisation has been on the wane.

The real estate-business disconnect

Yet, instead of asking the right questions, leaders in many companies have been preoccupied with the problem at face value — the empty office.

Discussions typically revolve around costs and the return of investment, leading many to jump the gun to permanently reduce their office footprint, or push through sweeping return-to-office mandates as a short-term solution.

Such decisions are in part due to the misalignment between the corporate real estate team and the business functions within companies.

For instance, the real estate team may set a 90% office occupancy target without consulting different functions on the potential impact that it may or may not have on business outcomes.

To compound the problem, workplace metrics that have been set pre-COVID may have also lost their relevance in today’s new ways of working. But the lack of communication means any changes could have been lost in translation, or simply not considered at all.

Any chance of fixing this begins with leaders who need to align and set a clear direction, create certainty, and clearly communicate to employees on what they stand to gain from an office return.

More importantly, as hybrid becomes widely adopted, companies must ensure that the employee experience they aim for extends beyond the workplace, and even into their homes or ‘third places’.

Doubling down on data

Of course, any major shifts need to be backed by data. The good news is companies don’t have to start from scratch.

With advancements in technology and the sophistication of data collection through the likes of smart sensors capturing data around the office, little is left to chance, including an understanding of the environment, lighting, occupancy, and more individualised preferences like desk height, temperature among other metrics.

Newer technologies are going a step further to tap into an unprecedented layer of data on other dimensions of the workplace experience.

Take JLL’s latest neuroscience study with bioinformatics firm EMOTIV. The study revealed insights into employees’ cognitive load, attention span, and engagement states when doing different tasks to discover how, when, and where employees do their best work.

With this wealth of data, the course of action it translates into is what matters most.

On one hand, some companies have decided to do away with an office altogether. One prime example is American automation platform Zapier, which operates remotely but flies its team to employee retreats twice a year.

Conversely, what we’ve commonly seen is companies playing catch-up or reacting to address the needs of diverse employee groups.

One possible approach is to differentiate between the two distinct populations in most offices — the “residents” who work from the office routinely, and the “transients” who only enter the office occasionally for meetings or purposeful team days.

The services to provide these groups, and what they want, are comparatively different. Analysing and layering different datasets will help in identifying specific types of spaces, environments, and services that enable each group to perform at their best. That insight will be crucial for guiding the next steps in accommodating their needs effectively.

Getting to that level, however, is a tall order, given that most companies still struggle to understand their “customers”.

Putting people first

Crafting an effective workplace strategy requires a collaborative top-down, bottom-up approach, integrating input from both top-level leadership and employees at all levels.

Leaders, in particular, need to recognise the importance of feeding purpose and values into workplace strategy and aligning it to business objectives to strengthen performance.

The fundamental lesson to learn from the empty office phenomenon is that people should always be part of the strategy. People experience matters. It’s about what goals the business is trying to achieve with its people, as opposed to what its real estate is trying to achieve.

Data may point you to what you have to focus on, but acting on the valuable insights and observations from people within the organisation is key to getting your strategy off on the right foot, and ultimately convincing employees back to the office.

This article, written on behalf of Emmy-Lou Quirke and Nathan Sri, was first published on JLL’s Trends & Insights.